Helicopter CEOs: Collaboration, Affordability Keys to Future Success

By Andrew Parker, Editor-in-Chief

Heads of the world’s major helicopter manufacturers said that technological innovation, R&D spending, collaboration and affordable designs are paramount to the future success of the rotorcraft industry during last week’s AHS Forum 68 in Fort Worth, Texas. The May 1 roundtable discussion was part of a three-day event from AHS International that featured AgustaWestland’s Dr. James Wang, vice president of R&D, Bell Helicopter President & CEO John Garrison, Boeing Military’s Phil Dunford, vice president/general manager, Eurocopter President & CEO Lutz Bertling, Lockheed Martin’s Dan Schultz, vice president of ship and aviation systems, and Sikorsky President Jeff Pino.

Left to right: Bell Helicopter President & CEO John Garrison, Phil Dunford, VP/GM of Boeing Military Systems, Eurocopter President & CEO Lutz Bertling, Mike Hirschberg, executive director of AHS International, James Wang, AgustaWestland VP of research and development, and Sikorsky President Jeff Pino. Photo by Andrew Parker

“I think I’ve heard a change in tone,” said Pino, who on Monday announced plans to retire as head of the company. He described Sikorsky’s X2 project as the “X, and from the U.S. government side, we’re not moving from Xs to Ys, and we’re not paying to move from Xs to Ys. Finally I’m hearing [leaders in the industry] starting to say, maybe we move to Ys on our own dime.” Helicopter makers should “invest in the future, instead of waiting for them to fund it,” Pino added.

“When you look at our business in the medium-term, we’re in a relatively good position,” explained Garrison. “With that said, there’s some very significant storm clouds brewing on the horizon with the production shutdowns that need to be filled in. But overall, on the military side we see opportunity.”

On the commercial side, there are “huge markets that are virtually untapped, the BRIC countries, India and China specifically,” Garrison continued. “There’s more turbine helicopters within a 100-mile radius of where we’re sitting, than there is operating in India and China. That speaks to the opportunities that the future brings in the commercial segment as we move into that.”

“What do we need to do as an industry to capture and help drive this growth?” Garrison asked. “The first two are around collaboration. The industry can collaborate—we’re intensely competitive, there’s no doubt about that, but there’s a couple things that we can work on together. The first is around the rules and regulatory framework in the emerging markets that fosters the growth of the helicopter/rotorcraft businesses, and we’ve done that, and need to continue to do that.” The other area, he continued, “is around safety—we need to do more of this. The IHST [International Helicopter Safety Team] has a goal of reducing accidents by 80 percent by 2016. Frankly, we’re not on track, there’s more work for us to do in that space, but collectively working as an industry we can drive improvements and a safety focus.”

According to Bertling, cooperation “goes beyond the regulatory framework, beyond safety, beyond research and development.” There is a “dramatic change in front of us,” he said. “For the first time last year, the Asian civil helicopter market was larger than the North American market. Still, Europe and the CIS region combined are the largest market but they are clearly in decline. Asia will be number one. Of course the U.S. military market is still dominant, with 60 percent of the value, but if you look at the forecasts, the world military market and the world civili market, somewhere in the next decade around 2025/2027, will be of equal size,” Bertling said.

“So the military markets will be in decline, and civil markets will continue to grow. The center of gravity will move, and there will be new entrants,” he continued, adding that in five years, the table at the CEO Forum will need to be longer. “There will be someone from Russian Helicopters sitting here, AVIC, there might be Koreans sitting here—Korea has declared the aerospace industry as their next strategic industry. … So global competition will change from new entrants to the helicopter market like Robinson, with the R66 and Marenco [Swisshelicopter with its SKy SH09] and so on, and market drivers will change. In particular the commercial market, where it’s not only operators who are seeking higher range and higher speed, but low-noise, low-emission, eco-friendly new technologies with educed lifecycle costs.”

Boeing’s Dunford read a quote from U.S. Army Aviation Maj. Gen. Anthony Crutchfield that said: “Revolutionary change in vertical lift aircraft must happen by 2030 to prevent the current helicopter fleet from becoming technologically obsolete.” Describing that concept as “hugely important,” Dunford said, “what worries me is that if we don’t get paranoid about it, we are all going to think we’re doing good and it’s going to fall down a crack. So it’s really important for all of us as an industry and a government, to really focus on what [we’re saying] here collectively.”

There’s a five-to-one ratio between helicopter budget and fixed-wing budget, in favor of fixed-wing, Dunford continued. “Because of the relevance of helicopters and rotary wing aircraft, I think it’s time that changes. The S&T budget isn’t sufficient right now.” He also quoted Maj. Gen. Tim Crosby who said: “$107 million a year spent on Army Aviation R&D is inadequate. How can you look to the future when you have a $7-billion budget, with just over $100 million spent on S&T? How can you look at the next vertical lift technology with a pittance budget like that.” Dunford explained the importance of “driving those numbers up to get the sort of attention that the fixed-wing community’s got,” because of the relevance of helicopters.

“It’s about affordability,” Garrison said. “We do provide incredible machines, but affordability’s vitally important not only to our military customers but also our commercial customers. Those that compete in the commercial sector can tell you just how aggressive that market is, and so as an industry, as a technology group driving affordability and technology … is incredibly important.”

What does the rotorcraft industrial base look like in 2020 and 2025, Dunford asked. “Because unless something comes along like Presidential helicopter or C-SAR, those things get pushed to the [out years] and there’s a big hole to fill.”